Top 20 Japanese pharma cos eyeing India drug majors for acquisitions

Discussion in 'Economy & Infrastructure' started by Srinivas_K, Apr 1, 2014.

  1. Srinivas_K

    Srinivas_K Senior Member Senior Member

    Jun 17, 2009
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    Top 20 Japanese pharma cos eyeing India drug majors for acquisitions
    Top 20 Japanese companies like Takeda, Astellas, Mitsui, Mitsubishi Pharma, Dainippon Sumitomo etc. are seriously scouting for various business opportunities in Indian drug market. There is an increasing interest on India even for contract manufacture and procurement of finished formulations driven by rising product development costs in Japan.

    The Japanese companies are eager to grow to the next level. Many such enterprises from Japan are chalking out inorganic paths and therefore identifying acquisition targets here that fit into their line of business segments. Companies are looking to strike potential buyouts of the established big pharma names in India, Deepak Anand, director-research, Japan External Trade Organisation (JETRO) told Pharmabiz.

    After 2008, when Daiichi Sankyo acquired India’s drug major Ranbaxy for $4.6 billion making it the largest buyout in the pharma space, several Japanese companies have set their sights on India.

    From a Japanese pharma company perspective, they get the manufacturing and research infrastructure along with the qualified scientific talent prowess from India. The companies are clear on India to grab much of the active pharmaceutical ingredients (API) expertise. “Therefore, we could expect many such buyout deals coming in as Japan is just waiting to fuel its M&A appetite. The trend points to mergers, reorganisation of business models and brisk outsourcing”, he added.

    According to JETRO, the number of pharma companies in Japan had been increasing with the entry of multinational drug makers but in the last couple of years this declined. It is primarily attributed to the slower growth of the domestic pharma sector. Another reason indicated is that global pharma entered Japan via the M&A route but later withdrew because of time lag between research and commercialisation.

    Today, Japan pharma market is the second largest in terms of value after US and the segment is estimated at $96.5 billion.

    From an India stand point, Japan is an important market for high quality and APIs, generics, biosimilars and medical devices. However a chunk of the export earnings come in from the API segment.

    In 2010, Japan has opened its market allowing 5 per cent of generic imports. Here the valuations are high but competition is intense and only Indian companies which have built competencies across drug development businesses can aggressively chase for orders, pointed out Sriram V Iyer, chief executive officer, ValuGen Pharma.

    India pharma which have sighted the opportunities in Japan to strengthen their generics marketing opportunities are Lupin and Zydus which have acquired companies in that country. While Lupin went in for two buyouts : Kyowa in 2007 and I’rom in 2011, Zydus in 2007 bought Tokyo-headquartered Nippon Universal Pharmaceutical to spearhead into the generic markets. Dr. Reddy’s Labs, Aurobindo Pharma, and Dishman too have fortified their presence in the region by setting up offices in Japan.

    Top 20 Japanese pharma cos eyeing India drug majors for acquisitions

    I think Indian Pharma companies should go for JV's, India will get infrastructure and technical know how expertise with Japanese collaboration.
    Last edited: Apr 1, 2014
    Abhiram likes this.

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